The Insurance (Amendment) Bill 2011 proposes to amend the Insurance Act 1964 to change the scope of the insurance compensation fund from one which covers the risks of policyholders of Irish authorised insurance companies to one which covers all insured risk in the State, except for specified excluded risks. So states the opening sentence in the Department of Finance's explanatory memorandum that accompanies the Bill. Nowhere in the explanatory memorandum, however, is there any reference to what this Bill is actually designed to serve and neither is there any explanation for the Government's insistence in pressing this legislation through both Houses of the Oireachtas on or before 29 September 2011.
The haste employed in pressing all Stages through the Seanad in a single day, the day following the Bill's publication, speaks volumes on this Government's total disregard for proper scrutiny, careful consideration and debate on important legislation that has significant consequences for all non-life, non-health policy-holding citizens and much more besides. While a little more time has been made available for Dáil Members to prepare for yesterday's and today's Second Stage, all remaining Stages will be guillotined by 7.30 p.m., yet this legislation provides for among other matters the imposition of a 2% levy on all insurance products with the exception of life and health policies. This is expected to realise €68 million per annum and will continue indefinitely, irrespective of any suggestion that it might be time-limited.
This is without question yet another tax and one unrelated to any notion of one's means or ability to pay. The Revenue Commissioners will collect the levy on behalf of the insurance compensation fund. So what is it all about? It is wholly and solely allied to the sale of Quinn Insurance Ltd, QIL, to the giant US insurance company, Liberty Mutual Direct, a deal set for ratification in the High Court on 4 October. The joint administrators of QIL, Michael McAteer and Paul McCann, require a Government transfer of some €280 million from the insurance compensation fund to seal the deal. The money involved will, of course, be recouped, not from the insurance industry, but from the pockets of every other non-life and non-health insurance policyholder in this State, irrespective of with which insurance company they do their business.
It is important to recall some of the background to this Bill. On Tuesday, 30 March 2010, the High Court appointed two joint provisional administrations to QIL, acting on the application of the newly-appointed Financial Regulator, Matthew Elderfield. Mr. Elderfield took up his appointment on 19 October 2009, less than six months prior to moving so aggressively against arguably the most successful, certainly the most competitive, player in the insurance market here and then a growing thorn in the side of the long-established players in the British market. From day one, my concern was first and foremost for the jobs of the some 2,800 employees in Quinn Insurance, for their dependent families and the economy of the Cavan-Fermanagh-Border region. Mr. Elderfield had also placed a bar on Quinn writing new business north of the Border and in Britain.
With fellow elected representatives of all parties, I met Mr. Elderfield at the Central Bank building on the following Tuesday, 6 April, at which we sought a lifting of the ban to protect 1,500 jobs directly impacted by his ban decision. A joint all-party appeal to Mr. Elderfield on 29 April was co-signed by myself with the now Taoiseach, Deputy Enda Kenny, the now Tánaiste and Minister for Foreign Affairs and Trade, Deputy Gilmore, and other Ministers, including Deputies Noonan, Bruton and Howlin. It sought the early restoration of the maximum access possible for QIL to the North of Ireland and British markets. Following this and intense lobbying, the next day Matthew Elderfield responded advising that he had decided to amend his direction and that private motor insurance business, both new and renewals, could again be written by Quinn in the Six Counties and Britain.
It was too late and not enough, however. That same day, Friday, 30 April, brought the news from the joint administrators that some 900 jobs were to go at different Quinn Insurance sites, with Cavan, Enniskillen, Navan and Blanchardstown to be most acutely hit. As convenor of the all-party cross-Border elected representatives group, I accompanied colleagues of all politics, North and South, to a series of meetings in the weeks following. The exchanges and questioning continued throughout all of 2010 as my files confirm. In the early course of its work, the group cited four agreed pillars of concern. These were the retention of all jobs and where they were already located and the future of the Border economy; the need to secure the €2.8 billion due to Anglo Irish Bank, the taxpayer, by Seán Quinn; the need to maintain the competitiveness brought by the Quinn Insurance model to the market; and the need to protect all Quinn policyholders.
In January 2011, we embarked on a renewed offensive securing meetings with the Financial Regulator, the Governor of the Central Bank, the administrators, the chief executive and chairman of Anglo Irish Bank and the chief executive of the National Treasury Management Agency. It was apparent to all of us on the group when attending the first of these meetings with the administrator, Michael McAteer, that proposals prepared by the Quinn representatives, which for a considerable time had been jointly worked on by Quinn representatives and a representative of Anglo Irish Bank, were not going to be given any consideration whatsoever, deadlines or no deadlines. The absolute rejection of our appeal for a serious evaluation of the then styled Quinn proposals beggared belief. Why would an administrator, someone entrusted with the task of overseeing the business and ensuring its continuation as a going concern and with the responsibility to consider all possible resolutions of the understood difficulties in the business, including its sale, so adamantly refuse to give any consideration whatsoever to proposals emanating from the senior management in the company, the very people who knew the business best?
We got our answer when we met the Financial Regulator, Mr. Matthew Elderfield, on Tuesday, 25 January of this year, a meeting also attended by the Governor of the Central Bank, Professor Patrick Honohan. In response to a direct question from an elected Member of these Houses, Senator Wilson, Mr. Elderfield stated that he had made it abundantly clear to the administrators and to all stakeholders that there was to be no consideration given to any proposal whatsoever that involved Seán Quinn, his family or any of his senior management team. Contrary to normal procedure, the administrators did not have a free hand.
This blatant admission shocked all in attendance and left us in no doubt that all was not as it should be. It now transpires that a tape may exist whereon administrator Mr. Michael McAteer is recorded as saying, and I quote from a typed purported transcript sent to my Cavan office:
Let me be ... categoric: The Quinn family are gone. They will never have an involvement whatsoever in this insurance company ever, ever again. Now I've been saying it for months ... I know they've been at various games in the background to try and manipulate things. That is the facts of the matter. We can't put that in an email. I can't put it in writing but that's what's going on.
This is a further shocking insight into the thinking and disposition of those placed at the helm of this major employer and player in the financial services sector and of those who sought their appointment.
Let there be no mistake about it. Our appeal has always been for fair and full consideration of the Quinn proposals, not to favour it. We believed from the thorough presentations we had received that it was a viable formula to address all the agreed pillars of concern we had adopted and were pursuing. We were not of course privy to the detail of any other proposal, so we could not make comparisons, but that was clearly not unique to us. It also applied to the administrators, who were given a clear instruction from the Financial Regulator, that is, no consideration for any Quinn-connected proposals. We have never been voices for Seán Quinn. If the Quinn proposals, properly assessed and properly evaluated, were shown to be deficient and not fit for purpose, then so be it. How much time have I remaining?